The manufacturer of Vauxhall, Stellantis, has issued a warning that Brexit-related challenges may compel it to shut down its UK factory.
This announcement raises concerns about the future of automotive manufacturing in the country.
Stellantis, which owns Vauxhall as well as other major brands like Peugeot, Citroen, and Fiat, highlighted that impending post-Brexit trade rules could severely impact its operations. Specifically, new regulations set to take effect soon could impose significant tariffs on exports, particularly affecting electric vehicles (EVs).
Currently, for vehicles to qualify for tariff-free trade, 40% of their value must originate from the UK or EU. This threshold is scheduled to rise to 45% next year, with an even stricter requirement of 60% for battery packs. By 2027, these figures will increase to 55% for vehicles and 70% for battery packs. Stellantis has expressed that the recent surge in raw material and energy costs makes it difficult to meet these stringent rules of origin requirements.
The company had committed to producing electric vans in the UK but now indicates these plans are at risk. Facing potential tariffs of 10% on exports to the EU, Stellantis may find its UK operations economically unviable.
The Society of Motor Manufacturers and Traders (SMMT) has echoed these concerns, calling for a pragmatic approach to the new rules. Mike Hawes, CEO of SMMT, stressed that prematurely implementing these regulations could undermine the competitiveness of UK manufacturing and deter future investments.
This situation underscores the broader challenges faced by the UK automotive industry in adapting to post-Brexit realities while also transitioning to electric mobility. Industry leaders urge the government to negotiate with the EU to delay the new rules, providing more time for manufacturers to adjust.
Stellantis’s warning serves as a critical reminder of the interconnectedness of trade policies and industrial strategy. Without timely support and flexible regulations, the future of the UK’s automotive manufacturing sector remains uncertain.